Mozambique president appoints IMF official as central bank governor
The appointment comes as Mozambique is battling to restore the confidence of donors such as the IMF as it grapples with a spiraling debt and financial crisis that has rocked the economy of one of the world’s poorest countries.
Zandamela, who holds a PhD from Johns Hopkins University, is currently head of mission to Djibouti and Somalia for the IMF.
The International Monetary Fund is demanding an external forensic audit of Mozambique’s public debt after a scandal over more than $1 billion in secret loans, its local representative said on Tuesday.
Parliament and the attorney-general’s office have launched investigations into the undisclosed borrowing in 2013 and 2014 but the government has baulked at opening up its books to outside auditors.
However, the IMF, which suspended assistance when the loans came to light this year, has insisted on external scrutiny as a precursor to resuming financial aid to the southern African country which has huge offshore gas reserves.
Investor confidence has also been shaken by revelations that the bulk of an $850 million “tuna bond” meant to build a fishing fleet was channeled to maritime security.
The debt crisis and aid suspension has hit Mozambique hard, with its currency, the metical, losing nearly 40 percent against the dollar since January.
With foreign debt soaring towards 100 percent of GDP, the government has been forced to revise its 2016 budget, which now shows a deficit equal to 11.3 percent of GDP, while the central bank hiked interest rates by 300 basis points in July to try to prop up the currency and contain inflation.